Reference no: EM132968766

Problem 1: Exchange differences arising when translating from the functional currency into the presentation currency are recognised in other comprehensive income and:

Select one:

Option 1: accumulated in equity using a foreign currency

Option 2: translation reserve recognised in profit or loss

Option 3: accumulated in equity using retained earnings

Option 4: recorded as a deferred asset and amortised over the expected useful life

Problem 2: Mega Limited acquired the net assets of Tech Limited. Mega Limited provided an item of furniture as part of the consideration. The fair value of the equipment was $50 000. It cost $80 000 and had a carrying amount of $46 000. Which of the following entries appropriately reflects the gain or loss on the equipment?

Select one:

Option 1: CR Loss on sale $4000

Option 2: Dr Gain on sale $4000

Option 3: CR Gain on sale $4000

Option 4: DR Loss on sale $4000